By Dan McCrum in New York and Henny Sender in Singapore
The three founders of Carlyle shared a $413m pay-out last year in a huge windfall that will focus more attention on private equity at a sensitive time in the US presidential election cycle.
Private equity already faces scrutiny for the way it has enabled executives, including Mitt Romney, frontrunner for the Republican nomination and former chief executive of Bain Capital, to build fortunes helped by a highly favourable tax perk.
The disclosure that David Rubenstein, Bill Conway and Daniel D?Aniello each received $138m in pay last year was contained in documents filed with the Securities and Exchange Commission ahead of Carlyle?s planned initial public offering on Nasdaq in New York.
Carlyle, based in Washington and once a defence-focused specialist renowned for its political advisers, including George H.W. Bush, former US president, and John Major, former prime minister, has grown into a global private equity group managing $148bn.
The trio, who founded Carlyle 25 years ago and retain about 60 per cent of its equity, each received base pay of $275,000, a bonus of $3.5m and $134m from their share of investors? profits, according to the filings.
The windfall came in a year in which Carlyle invested about $10.6bn and expected to return a record $17.8bn to its investors, $12.4bn from its private equity funds, according to letters sent to investors and seen by the Financial Times. ?To our knowledge, no alternative asset management firm has ever distributed this much,? said the letters, dated December 20.
Carlyle reiterated that serving the investors in its funds was its ?primary mission? adding that going public was a means rather than an end in itself. Carlyle intends to list as soon as market conditions for IPOs improve.
The main source of income for private equity executives is carried interest, a share of profits on investments made with money from outside investors. A longstanding tax break allows this reward to be treated as a capital gain, taxed in the US at 15 per cent, rather than income, typically taxed at 35 per cent.
Carlyle?s disclosure also drew attention to the lack of a remuneration committee at private equity groups, which are structured as partnerships rather than limited companies.
Charles Elson, head of the Weinberg Center for Corporate Governance, said: ?When you take on public capital, the rules have to change. You have to give the minority some assurance that compensation will be dealt with fairly and effectively, that?s why you have a compensation committee.?
? The Financial Times Limited 2012